Snipe Company has been purchasing a component, Part Q, for $19.20 per unit. Snipe is currently operating at 70% of capacity, and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q is estimated as follows: Direct materials $11.50 Direct labor 4.50 Variable factory overhead 1.12 Fixed factory overhead 3.15 Total $20.27 Prepare a differential analysis report dated March 12 of the current year. Round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make (Alternative 1) or Buy (Alternative 2) Part Q March 12 Make Part Q (Alternative 1) Buy Part Q (Alternative 2) Differential Effects (Alternative 2) Unit costs: $fill in the blank 35fe7afa507606f_2 $fill in the blank 35fe7afa507606f_3 $fill in the blank 35fe7afa507606f_4 fill in the blank 35fe7afa507606f_6 fill in the blank 35fe7afa507606f_7 fill in the blank 35fe7afa507606f_8 fill in the blank 35fe7afa507606f_10 fill in the blank 35fe7afa507606f_11 fill in the blank 35fe7afa507606f_12 fill in the blank 35fe7afa507606f_14 fill in the blank 35fe7afa507606f_15 fill in the blank 35fe7afa507606f_16 fill in the blank 35fe7afa507606f_18 fill in the blank 35fe7afa507606f_19 fill in the blank 35fe7afa507606f_20 Total unit costs $fill in the blank 35fe7afa507606f_21 $fill in the blank 35fe7afa507606f_22 $fill in the blank 35fe7afa507606f_23 Should the company make or buy the component? The company should the component.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Snipe Company has been purchasing a component, Part Q, for $19.20 per unit. Snipe is currently operating at 70% of capacity, and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q is estimated as follows:
| Direct materials | $11.50 | |
| Direct labor | 4.50 | |
| Variable factory |
1.12 | |
| Fixed factory overhead | 3.15 | |
| Total | $20.27 |
Prepare a differential analysis report dated March 12 of the current year. Round your answers to two decimal places. If an amount is zero, enter "0".
| Differential Analysis | |||
| Make (Alternative 1) or Buy (Alternative 2) Part Q | |||
| March 12 | |||
| Make Part Q (Alternative 1) |
Buy Part Q (Alternative 2) |
Differential Effects (Alternative 2) |
|
| Unit costs: | |||
| $fill in the blank 35fe7afa507606f_2 | $fill in the blank 35fe7afa507606f_3 | $fill in the blank 35fe7afa507606f_4 | |
| fill in the blank 35fe7afa507606f_6 | fill in the blank 35fe7afa507606f_7 | fill in the blank 35fe7afa507606f_8 | |
| fill in the blank 35fe7afa507606f_10 | fill in the blank 35fe7afa507606f_11 | fill in the blank 35fe7afa507606f_12 | |
| fill in the blank 35fe7afa507606f_14 | fill in the blank 35fe7afa507606f_15 | fill in the blank 35fe7afa507606f_16 | |
| fill in the blank 35fe7afa507606f_18 | fill in the blank 35fe7afa507606f_19 | fill in the blank 35fe7afa507606f_20 | |
| Total unit costs | $fill in the blank 35fe7afa507606f_21 | $fill in the blank 35fe7afa507606f_22 | $fill in the blank 35fe7afa507606f_23 |
Should the company make or buy the component?
The company should the component.
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